Phillips 66 PSX has commenced operations at its natural gas liquids fractionator, Sweeny Fractionator One, in Old Ocean, TX. The project is part of a major investment that the company is making in the Gulf Coast area.
Sweeny Fractionator One is located at the company’s Sweeny Complex in Old Ocean, about 60 miles southwest of downtown Houston. The fractionator has a capacity of 100,000 barrels per day (bpd).
Originally, the Phillips 66 Sweeny Refinery was constructed during World War II by the federal government to produce fuel and other products. The refinery was intentionally built near water but away from the Houston Ship Channel, which was considered a bigger security risk during the war.
Currently, the liquefied petroleum gases (LPGs) produced at Sweeny Fractionator One are transferred through pipelines to local petrochemical customers and to the market hub at Mont Belvieu, TX. On completion of the Phillips 66 Freeport LPG Export Terminal in the second half of 2016, the company will be able to transfer LPGs worldwide.
The company received consent from its board of directors for both the fractionator and the 150,000 bpd terminal in Feb 2014. Together, the projects signify an investment of over $3 billion and will generate 70 full-time jobs along with 5,500 construction jobs.
The petrochemical industry and the heating markets get their supply of purity ethane and LPG from Sweeny Fractionator One. The fractionator is linked to 250 miles of new pipelines and a multimillion barrel storage cavern complex.
Per the Houston Chronicle, the fractionator was scheduled to come online in October but was delayed due to a mechanical problem with a furnace. The plans for a second fractionator have also been deferred owing to weak market conditions. In fact, no final decision on the second project will be taken before 2016.
Phillips 66 carries a Zacks Rank #2 (Buy). Some better-ranked players from the energy sector are Energy Transfer Equity, L.P. ETE, ReneSola Ltd. SOL and Boardwalk Pipeline Partners, LP BWP. Each of these stocks sports a Zacks Rank #1 (Strong Buy).
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